Lesson 02 · Unit 2 · General
Hot wallets, cold wallets
A hot wallet's key lives on a device that talks to the internet — a browser extension, a phone app. A cold wallet's key lives on a device that does not. The difference is not quality. It is how many kinds of attack can reach the key.
Hot: fast, connected, exposed. Cold: slow, offline, unreachable.
Hot wallet
Cold wallet
Key lives
On an online device
On an offline device
Good for
Daily use, small amounts
Savings, large amounts
Can be drained by
Malware, phishing, a bad signature
Only what you physically approve
Cost of a mistake
Everything on it
Bounded by what you sign
Speed is money for the drainer
Speed IS money — for the drainer. One malicious signature in a hot wallet and the whole balance walks. People who trade size keep it cold and trade from a small hot wallet they can afford to lose.
The split that survives mistakes
1
A cold wallet for anything you would mind losing.
2
A hot wallet holding only what you actively trade.
3
A throwaway wallet for mints, airdrops and experiments.
Where this goes next
Cold storage has a physical form, and the attack it defends against has a shape worth knowing before you buy one.